• Prior 49.6
• Manufacturing PMI 44.1 vs 45.8 expected
• Prior 45.4
• Composite PMI 49.5 vs 49.0 expected
• Prior 48.8

Both the services and composite readings are 3-month highs but the manufacturing reading is a 6-month low. That once again speaks to the contrast in the two sectors, not just for France but across the euro area as well. The good news at least is that services activity has returned to growth, albeit marginally. That likely owes in part to the Paris Olympics.

However, price pressures did intensify on the month and that will be something that could bite at the ECB’s plans to cut rates in September if the trend persists across the region. HCOB notes that:

“The Olympic Games are fuelling the French economy. Business activity increased for French service providers for the first
time in three months. According to anecdotal evidence, this is partially due to the Olympic Games. Additionally, companies
reported higher output due to the end of the election period, which led to more certainty.

“The French economy seems on track for a recovery in the second half of the year, a recovery led by the service sector, but
both input and output prices remain a challenge for the French economy as inflation rates accelerated. Higher raw material
prices drove up input prices and led to the fastest increase in selling prices over the last three months.

“The French economy is projected to grow by 0.3% in the third quarter, according to our HCOB GDP Nowcast, due to the
service sector expansion being signalled by the HCOB Flash PMIs. On the other hand, the industrial sector is expected to
fall by almost 1% compared to the previous quarter.

“Lower demand and higher input prices appear to have worsened French manufacturers’ outlook for the next 12 months.
The corresponding index for future output expectations dropped by almost three index points. Demand overall and from
abroad weakened due to delays from customers.”

This article was written by Justin Low at www.forexlive.com.

The low earlier today hit 0.6583 and that brings in a test of the 200-day moving average (blue line) at 0.6584. The 50.0 Fib retracement level also sits nearby at 0.6580, so there are key technical levels in play now for AUD/USD. The pair is already seeing its worst streak since August last year, and is poised for an eighth consecutive daily decline.

But amid a test of the key levels above, the onus is now on buyers to see if they have the appetite to hold price action from a further drop.

There are also some large expiries at 0.6600 today so that could help in drawing some flows before we get to US trading at least.

That being said, the bigger picture outlook for the pair continues to rest on the same few factors outlined from yesterday.

The Chinese yuan continues to stay pressured and that is weighing on the aussie indirectly. Meanwhile, equities are also on the backfoot today so the overall risk mood isn’t helping. The underwhelming earnings from Tesla and muddied outlook for Alphabet is weighing on tech shares so far today.

Then, there is also the dollar side of the equation to consider. The greenback has been keeping firmer across the board on the week, though it faces some challenges from key data. The US PMI data will be one to watch today, then Q2 GDP on Thursday, and the PCE price index on Friday.

Going back to AUD/USD, a technical breakdown below the 0.6580-84 region will be a massive blow to buyers. That frees up scope for the pair to explore a downside push towards 0.6500 at least next.

This article was written by Justin Low at www.forexlive.com.

The post Ex-Dividend 25/07/2024 first appeared on IC Markets | Official Blog.

DXY (US Dollar Index):

Potential Direction: Bearish
Overall momentum of the chart: Bearish

Price could potentially make a bearish reaction off pivot and drop to 1st support.

Pivot: 104.68
Supporting reasons: Identified as a pullback resistance level, specifically at the 38.20% Fibonacci Retracement, indicating a potential area where sellers could enter the market after a retracement.

1st support: 103.70
Supporting reasons: Identified as a multi-swing low support level, suggesting a significant area where previous declines have found support.

1st resistance: 1105.40
Supporting reasons: Identified as a pullback resistance level, indicating a potential area where sellers could enter the market after a retracement.

EUR/USD:

Potential Direction: Bullish
Overall momentum of the chart: Bullish

Price could potentially make a bullish bounce off pivot and head toward 1st resistance.

Pivot: 1.0844
Supporting reasons: Identified as a pullback support level, specifically at the 38.20% Fibonacci Retracement, indicating a potential area where buyers could enter the market after a retracement.

1st support: 1.0768
Supporting reasons: Identified as a pullback support level, specifically at the 61.80% Fibonacci Retracement, suggesting a significant area where previous declines have found support.

1st resistance: 1.0913
Supporting reasons: Identified as a pullback resistance level, indicating a historical point where previous rallies have faced selling pressure or reversed.

EUR/JPY:

Potential Direction: Bearish
Overall momentum of the chart: Bearish

Factors contributing to the momentum: Price is below the bearish Ichimoku cloud.

Price could potentially make a bearish continuation towards 1st support.

Pivot: 169.63

Supporting reasons: Identified as a pullback resistance level, indicating a potential area where sellers could enter the market after a retracement.

1st support: 167.49
Supporting reasons: Identified as a swing-low support level, suggesting a significant area where previous declines have found support.

1st resistance: 171.93
Supporting reasons: Identified as an overlap resistance level, indicating a historical point where previous rallies have faced selling pressure or reversed.

EUR/GBP:

Potential Direction: Bullish
Overall momentum of the chart: Bullish

Price could potentially make a bullish continuation towards 1st resistance.

Pivot: 0.8403
Supporting reasons: Identified as an overlap support level, indicating a significant area where previous declines have found support.

1st support: 0.8383
Supporting reasons: Identified as a swing low support level, suggesting a significant area where previous declines have found support.

1st resistance: 0.8429
Supporting reasons: Identified as an overlap resistance level, indicating a historical point where previous rallies have faced selling pressure or reversed.

GBP/USD:

Potential Direction: Bearish
Overall momentum of the chart: Bearish

Price could potentially make a bearish continuation towards 1st support.

Pivot: 1.2943
Supporting reasons: Identified as an overlap resistance level, indicating a potential area where sellers could enter the market after a retracement.

1st support: 1.2859
Supporting reasons: Identified as a pullback support level, specifically at the 61.80% Fibonacci Projection and 161.80% Fibonacci Extension, indicating Fibonacci confluence and suggesting a significant area where previous declines have found support.

1st resistance: 1.3032
Supporting reasons: Identified as a swing high resistance level, indicating a historical point where previous rallies have faced selling pressure or reversed.

GBP/JPY:

Potential Direction: Bearish
Overall momentum of the chart: Bearish

Factors contributing to the momentum: Price is below the bearish Ichimoku cloud.

Price could potentially make a bearish reaction off pivot and drop to 1st support.

Pivot: 201.43
Supporting reasons: Identified as a pullback resistance level, indicating a potential area where sellers could enter the market after a retracement.

1st support: 198.00
Supporting reasons: Identified as an overlap support level, suggesting a significant area where previous declines have found support.

1st resistance: 204.04
Supporting reasons: Identified as an overlap resistance level, indicating a historical point where previous rallies have faced selling pressure or reversed.

USD/CHF:

Potential Direction: Bearish
Overall momentum of the chart: Bearish

Price could potentially make a bearish reaction off pivot and drop to 1st support.

Pivot: 0.8930
Supporting reasons: Identified as a pullback resistance level, specifically at the 61.80% Fibonacci Retracement, indicating a potential area where sellers could enter the market after a retracement.

1st support: 0.8847
Supporting reasons: Identified as a pullback support level, suggesting a significant area where previous declines have found support.

1st resistance: 0.8978
Supporting reasons: Identified as a swing high resistance level, indicating a historical point where previous rallies have faced selling pressure or reversed.

USD/JPY:

Potential Direction: Bearish
Overall momentum of the chart: Bearish

Price could potentially make a bearish reaction off pivot and drop to 1st support.

Pivot: 157.70
Supporting reasons: Identified as an overlap resistance level, specifically at the 38.20% Fibonacci Retracement, indicating a potential area where sellers could enter the market after a retracement.

1st support: 154.71
Supporting reasons: Identified as a swing low support level, specifically at the 127.20% Fibonacci Extension, suggesting a significant area where previous declines have found support.

1st resistance: 159.87
Supporting reasons: Identified as a pullback resistance level, indicating a historical point where previous rallies have faced selling pressure or reversed.

USD/CAD:

Potential Direction: Bullish
Overall momentum of the chart: Bullish

Price has made a bullish break through the pivot and could potentially rise towards the 1st resistance.

Pivot: 1.3779
Supporting reasons: Previously identified as a multi-swing-high resistance that was broken due to the strong bullish momentum.

1st support: 1.3752
Supporting reasons: Identified as a pullback support that aligns close to a 23.6% Fibonacci retracement level, indicating a potential area where price could find support.

1st resistance: 1.3828
Supporting reasons: Identified as a swing-high resistance, indicating a potential area that could halt any further upward movement.

AUD/USD:

Potential Direction: Bullish
Overall momentum of the chart: Bearish

Price is falling towards the pivot and could potentially make a bullish bounce off this level to rise towards the 1st resistance.

Pivot: 0.6591
Supporting reasons: Identified as a swing-low support that aligns with a 127.2% Fibonacci extension level, indicating a potential zone where buying interests could pick up to stage a minor rebound.

1st support: 0.6562
Supporting reasons: Identified as a swing-low support, suggesting a potential area where price could find strong support.

1st resistance: 0.6623
Supporting reasons: Identified as a pullback resistance, indicating a significant area that could halt further upward movement.

NZD/USD

Potential Direction: Bullish
Overall momentum of the chart: Bearish

Price is falling towards the pivot and could potentially make a bullish bounce off this level to rise towards the 1st resistance.

Pivot: 0.5883
Supporting reasons: Identified as a swing-low support, indicating a potential zone where buying interests could pick up to stage a minor rebound.

1st support: 0.5779
Supporting reasons: Identified as a pullback support, suggesting a significant area that could halt further downward momentum.

1st resistance: 0.5979
Supporting reasons: Identified as an overlap resistance, indicating a significant area that could halt further upward movement.

US30 (DJIA):

Potential Direction: Bullish

Overall Momentum of the Chart: Neutral

Price is trading close to the pivot and could potentially make a bullish bounce off this level to rise towards the 1st resistance.

Pivot: 40,270.30
Supporting reasons: Identified as a pullback support that aligns with a 50% Fibonacci retracement level, indicating a potential area where buying interests could pick up to resume the uptrend. The presence of a bullish Ichimoku Cloud adds further significance to this support zone.

1st Support: 39,607.55

Supporting Reasons: Identified as a pullback support that aligns with a 78.6% Fibonacci retracement level, suggesting a significant area where price could find strong support.

1st Resistance: 40,922.42

Supporting Reasons: Identified as a pullback resistance that aligns with a 61.8% Fibonacci retracement level, indicating a significant area that could halt further upward movement.

DE40 (DAX):

Potential Direction: Bullish

Overall Momentum of the Chart: Bullish

Price could fall towards the pivot and potentially make a bullish bounce off this level to rise towards the 1st resistance.

Pivot: 18,426.80
Supporting reasons: Identified as a pullback support, indicating a potential area where buying interests could pick up to resume the uptrend.

1st Support: 18,323.60

Supporting Reasons: Identified as a pullback support that aligns close to a 61.8% Fibonacci retracement, indicating a significant area where price could find strong support.

1st Resistance: 18,587.40

Supporting Reasons: Identified as a pullback resistance that aligns close to 78.6% Fibonacci projection, indicating a significant area that could halt further upward movement.

US500 (S&P 500): 

Potential Direction: Bullish

Overall momentum of the chart: Neutral

Price could fall towards the pivot and potentially make a bullish bounce off this level to rise towards the 1st resistance.

Pivot: 5,506.38
Supporting reasons: Identified as a pullback support that aligns close to a 38.2% Fibonacci retracement level, indicating a potential area where buying interests could pick up to stage a rebound.

1st support: 5,448.66

Supporting reasons: Identified as an overlap support that aligns close to a 50% Fibonacci retracement level, indicating a potential area where price could find strong support. 

1st resistance: 5,578.22

Supporting reasons: Identified as an overlap resistance that aligns close to a 50% Fibonacci retracement level, suggesting a critical area that could halt further upward movement.

BTC/USD (Bitcoin):

Potential Direction: Bullish

Overall momentum of the chart: Bullish

Price has stabilised the pivot and could potentially bounce off this level to rise towards the 1st resistance.

Pivot: 65,728.37

Supporting reasons: Identified as an overlap support that aligns close to a 23.6% Fibonacci retracement level, indicating a potential area where buying interests could pick up to resume the uptrend. The presence of a bullish Ichimoku Cloud adds further significance to this support zone.

1st support: 63,507.86

Supporting reasons: Identified as a pullback support that aligns close to a 38.2% Fibonacci retracement level, indicating a significant area that could halt further downward movement.

1st resistance: 70,045.45

Supporting reasons: Identified as a pullback resistance that aligns with a 161.8% Fibonacci extension level, indicating a potential barrier that could halt further upward movement.

ETH/USD (Ethereum):

Potential Direction: Bullish

Overall momentum of the chart: Neutral

Price is falling towards the pivot and could potentially make a bullish bounce off this level to rise towards the 1st resistance.

Pivot: 3,377.15

Supporting reasons: Identified as a pullback support that aligns with a 23.6% Fibonacci retracement level, indicating a potential area where buying interests could pick up to stage a rebound.

1st Support: 3,276.36

Supporting Reasons: Identified as a pullback support that aligns with a 38.2% Fibonacci retracement level, indicating a significant area that could halt further downward movement.

1st Resistance: 3,533.10

Supporting Reasons: Identified as a pullback resistance, indicating a historical barrier where selling pressures could intensify.

WTI/USD (Oil):

Potential Direction: Bearish

Overall Momentum of the Chart: Bearish

Price could rise towards the pivot and potentially make a bearish reversal off this level to fall towards the 1st support.

Pivot: 79.10

Supporting Reasons: Identified as an overlap resistance that aligns close to a 23.6% Fibonacci retracement level, indicating a potential area where selling pressures could intensify to resume the downtrend.

1st Support: 77.44

Supporting Reasons: Identified as an overlap support that aligns with a 61.8% Fibonacci retracement level, indicating a significant area where price could find strong support.

1st Resistance: 80.68

Supporting Reasons: Identified as an overlap resistance that aligns with a 50% Fibonacci retracement level, indicating a potential barrier that could halt further upward movement.

XAU/USD (GOLD):

Potential Direction: Bullish
Overall momentum of the chart: Bullish

Price could potentially make a bullish bounce off pivot and head towards 1st resistance.

Pivot: 2389.12
Supporting reasons: Identified as a pullback support level, specifically at the 50% Fibonacci Retracement, indicating a potential area where buyers could enter the market after a retracement.

1st support: 2335.64
Supporting reasons: Identified as a pullback support level, suggesting a significant area where previous declines have found support.

1st resistance: 2448.97
Supporting reasons: Identified as a pullback resistance level, specifically at the 61.80% Fibonacci Retracement, indicating a historical point where previous rallies have faced selling pressure or reversed.

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The post Wednesday 24th July 2024: Technical Outlook and Review first appeared on IC Markets | Official Blog.

• Prior -21.8; revised to -21.6

German consumer morale recovers significantly going into August as income expectations for households hit the highest in over two years. That comes amid stronger wage increases and slightly lower inflation, according to GfK. That said, the institute does warn that while the signs are promising, “it can also as quickly disappear again”.

This article was written by Justin Low at www.forexlive.com.

Global Markets:

•  Asian Stock Markets : Nikkei down 1.27%, Shanghai Composite down 0.23%, Hang Seng down 0.83% ASX down 0.16%
• Commodities : Gold at $2417.35 (0.47%), Silver at $29.41 (0.64%), Brent Oil at $81.33 (0.37%), WTI Oil at $77.29 (0.41%)
• Rates : US 10-year yield at 4.245, UK 10-year yield at 4.125, Germany 10-year yield at 2.438

News & Data:

• (USD) Existing Home Sales  3.89M vs 3.99M expected
• (USD) Richmond Manufacturing Index  -17 vs -7 expected

Markets Update:

On Wednesday, Asia-Pacific markets declined as traders assessed July business activity data from Japan and Australia, and tech earnings from the U.S. Tech and EV stocks in the region were hit hard after U.S. giants Alphabet and Tesla released their second-quarter earnings, with Tesla falling short of expectations. Hong Kong’s Hang Seng index fell 0.8%, reversing earlier gains, while mainland China’s CSI 300 slipped 0.1%. EV stocks like Nio and Li Auto dropped 4%, and Xpeng declined over 3%.

Japan’s Nikkei 225 dropped 1.2%, affected by utilities and real estate stocks, while the broader Topix fell 1.19%. Flash data from au Jibun Bank indicated that Japan’s business activity returned to growth, with the composite purchasing managers’ index for July rising to 52.6 from 49.7 in June, reflecting solid growth among private sector firms. Late Tuesday, Toyota announced a share buyback worth 806.85 billion yen ($5.17 billion) from major Japanese banks and insurers, including Tokio Marine, Mitsubishi UFJ Financial Group, and Sumitomo Mitsui Financial Group, boosting its shares by 0.13%.

South Korea’s Kospi fell 0.37%, while the small-cap Kosdaq rose 0.44%. Heavyweight Samsung Electronics plunged 1.91% amid a strike by its largest workers’ union, with recent talks yielding no results. Separately, Reuters reported that chip giant Nvidia approved Samsung chips for use in a processor for the China market.

Australia’s S&P/ASX 200 slipped 0.16% after the country’s private sector activity grew at a slower pace in July, with the composite purchasing managers’ index dropping to a six-month low of 50.2 from 50.7 in June, according to Juno Bank. In the U.S., the S&P 500 dipped 0.16%, the Nasdaq Composite edged down 0.06%, and the Dow Jones Industrial Average decreased by 0.14%.

Upcoming Events: 

• 1:45 PM GMT – CAD BOC Rate Statement
• 1:45 PM GMT – CAD Overnight Rate
• 1:45 PM GMT – USD Flash Manufacturing PMI
• 1:45 PM GMT – USD Flash Services PMI
• 2:00 PM GMT – USD New Home Sales
• 2:30 PM GMT – CAD BOC Press Conference
• 2:30 PM GMT – USD Crude Oil Inventories

The post Wednesday 24th July 2024: Asia-Pacific Markets Drop Amid Mixed Economic Data first appeared on IC Markets | Official Blog.

IC Markets Europe Fundamental Forecast | 24 July 2024

What happened in the Asia session?

The flash PMI report for Australia by S&P Global released this morning showed Composite PMI activity easing towards neutral. Services activity fell from 51.2 in June to 50.8 in July which was a 6-month low while manufacturing contracted for the sixth consecutive month. The stagnation in overall business activity added further downward pressure on the Aussie as it headed south toward the threshold of 0.6600.

The flash PMI report by S&P Global showed business activity returning to expansion in Japan as this index increased from 49.7 in the previous month to 52.6 in July. This flash report was indicative of solid growth with service providers leading the expansion as activity growth hit a 3-month high. The yen’s strength continues to increase this week, driving USD/JPY under 155.50 this morning.

What does it mean for the Europe & US sessions?

S&P Global will release the flash results for Composite PMI for the month of July for the Euro Area and the United Kingdom. Business activity is expected to remain relatively stable from the previous month in the Euro Area but economic growth softened to three-month low in June and a further slowdown can not be ruled out for this economic region. Should the flash results disappoint market expectations, the Euro could face renewed overhead pressures.

Meanwhile, private sector activity in the U.K. slowed to a year-to-date low in June as new orders lost momentum while employment eased further. Should the flash results disappoint market expectations, Cable could face renewed overhead pressures.

The Dollar Index (DXY)

Key news events today

S&P Global Composite PMI (1:45 pm GMT)

What can we expect from DXY today?

S&P Global will release the flash results for Composite PMI for the month of July where business activity is expected to remain relatively stable from the previous month. Output growth accelerated while employment saw a renewed rise in June. Should the flash results beat market expectations, it could function as a potential bullish catalyst for the dollar.

Central Bank Notes:

• The Federal Funds Rate target range remained unchanged at 5.25% to 5.50% for the seventh meeting in a row.
• The Committee seeks to achieve maximum employment and inflation at the rate of 2% over the longer run and judges that the risks to achieving its employment and inflation goals have moved toward better balance over the past year.
• The economic outlook is uncertain, and the Committee remains highly attentive to inflation risks. Inflation has eased over the past year but remains elevated and in recent months, there has been modest further progress toward the Committee’s 2% inflation objective.
• Recent indicators suggest that economic activity has continued to expand at a solid pace while job gains have remained strong, and the unemployment rate has remained low.
• In considering any adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks and does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2%.
• In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook and would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals.
• In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities. Beginning in June, the Committee will slow the pace of decline of its securities holdings by reducing the monthly redemption cap on Treasury securities from $60 billion to $25 billion.
• The Committee will maintain the monthly redemption cap on agency debt and agency mortgage-backed securities at $35 billion and will reinvest any principal payments in excess of this cap into Treasury securities.
• Next meeting runs from 30 to 31 July 2024.

Next 24 Hours Bias

Weak Bullish

Gold (XAU)

Key news events today

S&P Global Composite PMI (1:45 pm GMT)

What can we expect from Gold today?

S&P Global will release the flash results for Composite PMI for the month of July where business activity is expected to remain relatively stable from the previous month. Output growth accelerated while employment saw a renewed rise in June. Should the flash results beat market expectations, it could function as a potential bullish catalyst for the dollar to push gold prices lower.

Next 24 Hours Bias

Weak Bullish

The Australian Dollar (AUD)

Key news events today

S&P Global Composite PMI (11:00 pm GMT 23rd July)

What can we expect from AUD today?

The flash PMI report for Australia by S&P Global released this morning showed Composite PMI activity easing towards neutral. Services activity fell from 51.2 in June to 50.8 in July which was a 6-month low while manufacturing contracted for the sixth consecutive month. The stagnation in overall business activity added further downward pressure on the Aussie as it headed south toward the threshold of 0.6600.

Central Bank Notes:

• The RBA kept the cash rate target unchanged at 4.35%, marking the ninth pause out of the last ten board meetings.
• Over the year to April, the monthly CPI indicator rose by 3.6% in headline terms, and by 4.1% excluding volatile items and holiday travel, which was similar to its pace in December 2023.
• The central forecasts published in May were for inflation to return to the target range of 2–3% in the second half of 2025 and to the midpoint in 2026 while there have been indications that momentum in economic activity is weak, including slow growth in GDP, a rise in the unemployment rate and slower-than-expected wages growth.
• Inflation is easing but has been doing so more slowly than previously expected and it remains high and the Board expects that it will be some time yet before inflation is sustainably in the target range.
• The path of interest rates that will best ensure that inflation returns to target in a reasonable timeframe remains uncertain and the Board is not ruling anything in or out.
• Next meeting is on 6 August 2024.

Next 24 Hours Bias

Medium Bearish

The Kiwi Dollar (NZD)

Key news events today

No major news events.

What can we expect from NZD today?

Stronger demand for the dollar drove the Kiwi under the threshold of 0.6000 overnight. This currency pair continued to slide lower towards 0.5950 at the beginning of the Asia session – these are the support and resistance levels for today.

Support: 0.5880

Resistance: 0.5980

Central Bank Notes:

• The Monetary Policy Committee kept the OCR unchanged at 5.50% for the eighth meeting in a row and agreed that restrictive monetary policy is reducing domestic demand and consumer price inflation.
• The Committee is confident that inflation will return to within its 1-3% target range over the second half of 2024.
• The decline in inflation reflects receding domestic pricing pressures, as well as lower inflation for goods and services imported into New Zealand while recent monthly Selected Price Indexes suggest weakening in some of the more volatile inflation components, while survey measures of cost pressures and pricing intentions have continued to decline.
• Non-performing bank loans and corporate insolvencies have increased from low levels in line with declining economic activity while bank credit growth also remains very subdued, in line with weakness in the domestic economy and low business and consumer confidence.
• Next meeting is on 14 August 2024.

Next 24 Hours Bias

Medium Bearish

The Japanese Yen (JPY)

Key news events today

S&P Global Composite PMI (8:30 am GMT)

What can we expect from JPY today?

The flash PMI report by S&P Global showed business activity returning to expansion in Japan as this index increased from 49.7 in the previous month to 52.6 in July. This flash report was indicative of solid growth with service providers leading the expansion as activity growth hit a 3-month high. The yen’s strength continues to increase this week, driving USD/JPY under 155.50 this morning.

Central Bank Notes:

• The Bank considers that the policy framework of Quantitative and Qualitative Monetary Easing (QQE) with Yield Curve Control and the negative interest rate policy to date have fulfilled their roles. With the price stability target of 2%, it will conduct monetary policy as appropriate, guiding the short-term interest rate as a primary policy tool.
• The Bank of Japan decided on the following measures:
  1. The Bank will encourage the uncollateralized overnight call rate to remain at around 0 to 0.1% while continuing its Japanese government bonds (JGB) purchases in accordance with the decisions made at the March 2024 MPM.
  2. The Bank decided, by an 8-1 majority vote, that it would reduce its purchase amount of JGBs thereafter to ensure that long-term interest rates would be formed more freely in financial markets.
• Underlying CPI inflation is expected to increase gradually, since it is projected that the output gap will improve and that medium- to long-term inflation expectations will rise with a virtuous cycle between wages and prices continuing to intensify.
• In the second half of the projection period of the April 2024 Outlook for Economic Activity and Prices (Outlook Report), it is likely to be at a level that is generally consistent with the price stability target of 2%.
• The year-on-year rate of increase in the CPI (all items less fresh food), has been in the range of 2.0-2.5% recently, as services prices have continued to rise moderately, reflecting factors such as wage increases, although the effects of a pass-through to consumer prices of cost increases led by the past rise in import prices have waned. Inflation expectations have risen moderately.
• Japan’s economy has recovered moderately, although some weakness has been seen in part while is likely to keep growing at a pace above its potential growth rate, with overseas economies continuing to grow moderately and as a virtuous cycle from income to spending gradually intensifies against the background of factors such as accommodative financial conditions.
• Next meeting is on 31 July 2024.

Next 24 Hours Bias

Weak Bearish

The Euro (EUR)

Key news events today

S&P Global Composite PMI (8:00 am GMT)

What can we expect from EUR today?

S&P Global will release the flash results for Composite PMI for the month of July where business activity is expected to remain relatively stable from the previous month. Economic growth softened to three-month low in June and a further slowdown can not be ruled out for the Euro Area. Should the flash results disappoint market expectations, the Euro could face renewed overhead pressures.

Central Bank Notes:

• The Governing Council today decided to keep the three key ECB interest rates unchanged in July, following a 25 basis points cut in June.
• Accordingly, the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 4.25%, 4.50% and 3.75% respectively.
• Monetary policy is keeping financing conditions restrictive but at the same time, domestic price pressures are still high, services inflation is elevated and headline inflation is likely to remain above the target well into next year.
• While some measures of underlying inflation ticked up in May owing to one-off factors, most measures were either stable or edged down in June.
• The incoming information indicates that the euro area economy grew in the second quarter, but likely at a slower pace than in the first quarter.
• Services continue to lead the recovery, while industrial production and goods exports have been weak – investment indicators point to muted growth in 2024, amid heightened uncertainty.
• The Eurosystem no longer reinvests all of the principal payments from maturing securities purchased under the pandemic emergency purchase programme (PEPP), reducing the PEPP portfolio by €7.5 billion per month on average and the Governing Council intends to discontinue reinvestments under the PEPP at the end of 2024.
• The Council is determined to ensure that inflation returns to its 2% medium-term target in a timely manner and will keep policy rates sufficiently restrictive for as long as necessary to achieve this aim and is not pre-committing to a particular rate path.
• Next meeting is on 12 September 2024.

Next 24 Hours Bias

Medium Bearish

The Swiss Franc (CHF)

Key news events today

No major news events.

What can we expect from CHF today?

Stronger demand for the dollar lifted USD/CHF above the threshold of 0.8900 overnight. This currency pair was trading around 0.8920 as Asian markets came online and is expected to continue its ascend as the day progresses – these are the support and resistance levels for today.

Support: 0.8880

Resistance: 0.8930

Central Bank Notes:

• The SNB eased monetary policy by lowering its key policy rate by 25 basis points for the second consecutive meeting, going from 1.50% to 1.25% in June.
• The underlying inflationary pressure has decreased again compared to the previous quarter but inflation had risen slightly since the last monetary policy assessment, and stood at 1.4% in May.
• The inflation forecast puts average annual inflation at 1.3% for 2024, 1.1% for 2025 and 1.0% for 2026, based on the assumption that the SNB policy rate is 1.25% over the entire forecast horizon.
• Swiss GDP growth was moderate in the first quarter of 2024 with the services sector continuing to expand, while manufacturing stagnated.
• Growth is likely to remain moderate in Switzerland in the coming quarters as the SNB anticipates GDP growth of around 1% this year while currently expecting growth of around 1.5% for 2025.
• Next meeting is on 26 September 2024.

Next 24 Hours Bias

Medium Bullish

The Pound (GBP)

Key news events today

S&P Global Composite PMI (8:30 am GMT)

What can we expect from GBP today?

S&P Global will release the flash results for Composite PMI for the month of July where business activity is expected to remain relatively stable from the previous month. Private sector activity in the U.K. slowed to a year-to-date low in June as new orders lost momentum while employment eased further. Should the flash results disappoint market expectations, Cable could face renewed overhead pressures.

Central Bank Notes:

• The Bank of England’s Monetary Policy Committee (MPC) voted by a majority of 7-to-2 to maintain its Official Bank Rate at 5.25% for the seventh consecutive meeting.
• Two members preferred to reduce the Bank Rate by 25 basis points to 5%, an increase of one from the previous meeting.
• Twelve-month CPI inflation fell to 2.0% in May from 3.2% in March, close to the May Monetary Policy Report projection. CPI inflation is expected to rise slightly in the second half of this year, as declines in energy prices last year fall out of the annual comparison.
• Reflecting a margin of slack in the economy, CPI inflation had been projected to be 1.9% in two years’ time and 1.6% in three years.
• UK GDP appears to have grown more strongly than expected during the first half of this year. Business surveys, however, remain consistent with a slower pace of underlying growth, of around 0.25% per quarter.
• UK real GDP had increased by 0.6% in 2024 Q1, 0.2% stronger than had been expected in the May Monetary Policy Report and Bank staff now expect GDP growth of 0.5% in 2024 Q2 as a whole, stronger than the 0.2% rate that had been incorporated in the May Report.
• The MPC remains prepared to adjust monetary policy as warranted by economic data to return inflation to the 2% target sustainably. It will therefore continue to monitor closely indications of persistent inflationary pressures and resilience in the economy as a whole, including a range of measures of the underlying tightness of labour market conditions, wage growth and services price inflation.
• Next meeting is on 1 August 2024.

Next 24 Hours Bias

Medium Bearish

The Canadian Dollar (CAD)

Key news events today

BoC Monetary Policy Statement (1:45 pm GMT)

BoC Press Conference (2:30 pm GMT)

What can we expect from CAD today?

The Bank of Canada (BoC) is expected to cut its overnight rate for the second consecutive meeting by 25 basis points to bring it down to 4.50% while continuing to normalize its balance sheet. Should BoC Governor Tiff Macklem’s press conference also convey a dovish outlook on future monetary policy action, the Loonie is all but certain to come under intense selling pressures – a move that would boost USD/CAD later today.

Central Bank Notes:

• The Bank of Canada reduced its target for the overnight rate by 25 basis points to 4.75% while continuing its policy of balance sheet normalization.
• Canada’s economic growth resumed in the first quarter of 2024 after stalling in the second half of last year. At 1.7%, first-quarter GDP growth was slower than forecast in the MPR but consumption growth was solid at about 3%, and business investment and housing activity also increased.
• Inflation remains above the 2% target and shelter price inflation is high but total CPI inflation has declined consistently over the course of this year, and indicators of underlying inflation increasingly point to a sustained easing.
• CPI inflation has eased from 3.4% in December to 2.7% in April while the preferred measures of core inflation have come down from about 3.5% last December to about 2.75% in April and the 3-month rate of core inflation slowed from about 3.5% in December to under 2% in March and April.
• In the labour market, businesses are continuing to hire workers as employment has been growing, but at a slower pace than the working-age population while elevated wage pressures look to be moderating gradually.
• The Governing Council is closely watching the evolution of core inflation and remains particularly focused on the balance between demand and supply in the economy, inflation expectations, wage growth, and corporate pricing behaviour.
• Recent data has increased the council’s confidence that inflation will continue to move towards the 2% target. Nonetheless, risks to the inflation outlook remain.
• Next meeting is on 24 July 2024.

Next 24 Hours Bias

Medium Bullish

Oil

Key news events today

EIA Crude Oil Inventories (2:30 pm GMT)

What can we expect from Oil today?

Despite a higher-than-anticipated draw of 3.9M barrels of crude in the API stockpiles, oil prices remain under intense overhead pressures. WTI oil tumbled under $78 per barrel overnight but recovered to retrace higher to trade around $78.50 as Asian markets came online. Should the EIA inventories also post a significant drawdown, it could function as a potential floor for oil prices later today.

Next 24 Hours Bias

Medium Bearish

The post IC Markets Europe Fundamental Forecast | 24 July 2024 first appeared on IC Markets | Official Blog.

The theme among major currencies recently has been a stronger yen, with USD/JPY continuing to drop. But the dollar itself is also seen advancing against the rest of the major currencies bloc. In particular, the antipodeans have been softer this week amid ongoing weakness with the Chinese yuan as well. Here’s a snapshot of things so far today:

The ranges for the day are being stretched as we look to European trading and that is keeping things interesting to start the session.

In the equities space, we’re seeing a further retreat in risk sentiment as well. S&P 500 futures are down 0.6% with Nasdaq futures down 1.0% currently. That owes much to a miss on earnings from Tesla and even with a beat for Alphabet earnings, advertising sales were on the softer side and costs were higher – a potential warning for the coming quarters. As such, tech shares are the ones pulled lower for the most part currently.

Looking to the session ahead, we’ll have PMI data from the euro area and UK to mix things up. And that will bring in the euro and pound to the table, as well as some indirect spillovers to risk and yields.

0600 GMT – Germany August GfK consumer sentiment0715 GMT – France July flash manufacturing, services, composite PMI0730 GMT – Germany July flash manufacturing, services, composite PMI0800 GMT – Eurozone July flash manufacturing, services, composite PMI0830 GMT – UK July flash manufacturing, services, composite PMI1100 GMT – US MBA mortgage applications w.e. 19 July

That’s all for the session ahead. I wish you all the best of days to come and good luck with your trading! Stay safe out there.

This article was written by Justin Low at www.forexlive.com.

It has been a recurring theme this week to see the Japanese yen pick up some bids in the handover from Asia to Europe. And in the overall picture, the yen itself is firming across the board despite the dollar also holding its own against the rest of the major currencies bloc. And that comes despite Treasury yields holding relatively steady in the last few days.

There’s not much of a major catalyst behind the drive lower in USD/JPY. But one can argue that dip buyers have lost much of their appetite, after Japan intervened in the market on 11-12 July. That led to a break below the key trendline support (white line) for this year. And inevitably, that is sapping much of the positive momentum in USD/JPY.

The latest drop today is a crucial one as it not only threatens a break under the 155.00 mark.

But the 100-day moving average (red line) at 155.35 is also looking to give way at the moment. And that will see buyers relinquish further control of the pair in the bigger picture. The last time the pair traded below the 100-day moving average was all the way back in March.

The June low of 154.52 will be a minor support level to watch next. That before we get to the 38.2 Fib retracement level at 153.66 potentially.

It looks like the yen might still stay buoyed until we get closer to the BOJ policy meeting next week at last. Are we setting up for a sell the fact trade here for the yen?

This article was written by Justin Low at www.forexlive.com.

Stocks Flat as Earnings Released – S&P Off 0.15%

US Stock markets gave up earlier gains in trading yesterday to finish close to flat as Alphabet earnings beat expectations but Tesla’s number disappointed investors. The Dow dropped 0.14%, the S&P 0.16% and the Nasdaq fell just 0.06% to close a relatively subdued session. US Treasury yields drifted lower after Home Sales data and the Richmond Manufacturing Index both came in under expectations, the 2-year losing 3.6 basis points to fall to 4.487% and the 10-year dropping 1.7 basis points to 4.243%. The main mover in FX was the Yen again which appreciated against the dollar and on the crosses, while the dollar index finished the day close to flat at 104.45. Oil prices dived again as demand concerns and Gaz ceasefire hopes continue to weigh, Brent dropped 1.7% to $81.01 a barrel and WTI lost 1.8% to trade down to $76.96 by the close. Gold gained some ground to trade back to highs hit on Monday, trading at $2,410 on the Asian open.

Yen Continues to Push Higher in Early Trading

There were big moves in the Yen again yesterday as traders continued to see unwinding of carry trades ahead of next weeks Bank of Japan meeting. UsdJpy decreased nearly 1%, but more pain came on the crosses with EurJpy losing 1.27%, GbpJpy 1.2% and AudJpy 1.5%. There are some in Tokyo now pushing expectations for a 15-basis point raise next week from the central bank which would really put the cat amongst the pigeons and see even further appreciation in the home currency. UsdJpy has traded down to 155.27 this morning, which is its lowest level since June 7^th and traders are expecting further volatility in the sessions ahead with the bias firmly in a buy Yen mode.

Traders Brace for Another Busy Day Ahead

Traders are preparing for another busy day ahead as they are hit by a raft of data and the latest rate update from the Bank of Canada. Flash Services and Manufacturing PMI data is due out of a plethora of jurisdictions today across all the trading sessions and traders are expecting to see volatility in markets around the tier 1 releases. In addition to the PMI data releases we have the key Bank of Canada rate decision where once again the central bank is expected to cut rates by a further 25 basis points, however Loony traders are expecting to see plenty of moves in the currency around any further forward guidance.

The post General Market Analysis 24/07/2024 first appeared on IC Markets | Official Blog.

IC Markets Asia Fundamental Forecast | 24 July 2024

What happened in the U.S. session?

Existing home sales have been poor throughout 2023 and the trend is no different this year as sales fell from an annual rate of 4.11M in May to 3.89M in June – the lowest sales rate since last December. Meanwhile, the Richmond Manufacturing Index has deteriorated since mid-2022 and has remained weak ever since. Manufacturing activity crumbled as it fell from -10 in the previous month to -17 in July, much worse than the forecast of -7 points. These latest macroeconomic data points highlighted the ongoing weakness in the housing and manufacturing sectors but that did stop the dollar index (DXY) from making an overnight high of 104.53. This index remains elevated and looks set to edge higher as the day progresses.

What does it mean for the Asia Session?

The flash PMI report for Australia by S&P Global released this morning showed Composite PMI activity easing towards neutral. Services activity fell from 51.2 in June to 50.8 in July which was a 6-month low while manufacturing contracted for the sixth consecutive month. The stagnation in overall business activity added further downward pressure on the Aussie as it headed south toward the threshold of 0.6600.

The Dollar Index (DXY)

Key news events today

S&P Global Composite PMI (1:45 pm GMT)

What can we expect from DXY today?

S&P Global will release the flash results for Composite PMI for the month of July where business activity is expected to remain relatively stable from the previous month. Output growth accelerated while employment saw a renewed rise in June. Should the flash results beat market expectations, it could function as a potential bullish catalyst for the dollar.

Central Bank Notes:

• The Federal Funds Rate target range remained unchanged at 5.25% to 5.50% for the seventh meeting in a row.
• The Committee seeks to achieve maximum employment and inflation at the rate of 2% over the longer run and judges that the risks to achieving its employment and inflation goals have moved toward better balance over the past year.
• The economic outlook is uncertain, and the Committee remains highly attentive to inflation risks. Inflation has eased over the past year but remains elevated and in recent months, there has been modest further progress toward the Committee’s 2% inflation objective.
• Recent indicators suggest that economic activity has continued to expand at a solid pace while job gains have remained strong, and the unemployment rate has remained low.
• In considering any adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks and does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2%.
• In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook and would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals.
• In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities. Beginning in June, the Committee will slow the pace of decline of its securities holdings by reducing the monthly redemption cap on Treasury securities from $60 billion to $25 billion.
• The Committee will maintain the monthly redemption cap on agency debt and agency mortgage-backed securities at $35 billion and will reinvest any principal payments in excess of this cap into Treasury securities.
• Next meeting runs from 30 to 31 July 2024.

Next 24 Hours Bias

Weak Bullish

Gold (XAU)

Key news events today

S&P Global Composite PMI (1:45 pm GMT)

What can we expect from Gold today?

S&P Global will release the flash results for Composite PMI for the month of July where business activity is expected to remain relatively stable from the previous month. Output growth accelerated while employment saw a renewed rise in June. Should the flash results beat market expectations, it could function as a potential bullish catalyst for the dollar to push gold prices lower.

Next 24 Hours Bias

Weak Bullish

The Australian Dollar (AUD)

Key news events today

S&P Global Composite PMI (11:00 pm GMT 23rd July)

What can we expect from AUD today?

The flash PMI report for Australia by S&P Global released this morning showed Composite PMI activity easing towards neutral. Services activity fell from 51.2 in June to 50.8 in July which was a 6-month low while manufacturing contracted for the sixth consecutive month. The stagnation in overall business activity added further downward pressure on the Aussie as it headed south toward the threshold of 0.6600.

Central Bank Notes:

• The RBA kept the cash rate target unchanged at 4.35%, marking the ninth pause out of the last ten board meetings.
• Over the year to April, the monthly CPI indicator rose by 3.6% in headline terms, and by 4.1% excluding volatile items and holiday travel, which was similar to its pace in December 2023.
• The central forecasts published in May were for inflation to return to the target range of 2–3% in the second half of 2025 and to the midpoint in 2026 while there have been indications that momentum in economic activity is weak, including slow growth in GDP, a rise in the unemployment rate and slower-than-expected wages growth.
• Inflation is easing but has been doing so more slowly than previously expected and it remains high and the Board expects that it will be some time yet before inflation is sustainably in the target range.
• The path of interest rates that will best ensure that inflation returns to target in a reasonable timeframe remains uncertain and the Board is not ruling anything in or out.
• Next meeting is on 6 August 2024.

Next 24 Hours Bias

Medium Bearish

The Kiwi Dollar (NZD)

Key news events today

No major news events.

What can we expect from NZD today?

Stronger demand for the dollar drove the Kiwi under the threshold of 0.6000 overnight. This currency pair continued to slide lower towards 0.5950 at the beginning of the Asia session – these are the support and resistance levels for today.

Support: 0.5880

Resistance: 0.5980

Central Bank Notes:

• The Monetary Policy Committee kept the OCR unchanged at 5.50% for the eighth meeting in a row and agreed that restrictive monetary policy is reducing domestic demand and consumer price inflation.
• The Committee is confident that inflation will return to within its 1-3% target range over the second half of 2024.
• The decline in inflation reflects receding domestic pricing pressures, as well as lower inflation for goods and services imported into New Zealand while recent monthly Selected Price Indexes suggest weakening in some of the more volatile inflation components, while survey measures of cost pressures and pricing intentions have continued to decline.
• Non-performing bank loans and corporate insolvencies have increased from low levels in line with declining economic activity while bank credit growth also remains very subdued, in line with weakness in the domestic economy and low business and consumer confidence.
• Next meeting is on 14 August 2024.

Next 24 Hours Bias

Medium Bearish

The Japanese Yen (JPY)

Key news events today

S&P Global Composite PMI (8:30 am GMT)

What can we expect from JPY today?

The flash PMI report by S&P Global showed business activity returning to expansion in Japan as this index increased from 49.7 in the previous month to 52.6 in July. This flash report was indicative of solid growth with service providers leading the expansion as activity growth hit a 3-month high. The yen’s strength continues to increase this week, driving USD/JPY under 155.50 this morning.

Central Bank Notes:

• The Bank considers that the policy framework of Quantitative and Qualitative Monetary Easing (QQE) with Yield Curve Control and the negative interest rate policy to date have fulfilled their roles. With the price stability target of 2%, it will conduct monetary policy as appropriate, guiding the short-term interest rate as a primary policy tool.
• The Bank of Japan decided on the following measures:
  1. The Bank will encourage the uncollateralized overnight call rate to remain at around 0 to 0.1% while continuing its Japanese government bonds (JGB) purchases in accordance with the decisions made at the March 2024 MPM.
  2. The Bank decided, by an 8-1 majority vote, that it would reduce its purchase amount of JGBs thereafter to ensure that long-term interest rates would be formed more freely in financial markets.
• Underlying CPI inflation is expected to increase gradually, since it is projected that the output gap will improve and that medium- to long-term inflation expectations will rise with a virtuous cycle between wages and prices continuing to intensify.
• In the second half of the projection period of the April 2024 Outlook for Economic Activity and Prices (Outlook Report), it is likely to be at a level that is generally consistent with the price stability target of 2%.
• The year-on-year rate of increase in the CPI (all items less fresh food), has been in the range of 2.0-2.5% recently, as services prices have continued to rise moderately, reflecting factors such as wage increases, although the effects of a pass-through to consumer prices of cost increases led by the past rise in import prices have waned. Inflation expectations have risen moderately.
• Japan’s economy has recovered moderately, although some weakness has been seen in part while is likely to keep growing at a pace above its potential growth rate, with overseas economies continuing to grow moderately and as a virtuous cycle from income to spending gradually intensifies against the background of factors such as accommodative financial conditions.
• Next meeting is on 31 July 2024.

Next 24 Hours Bias

Weak Bearish

The Euro (EUR)

Key news events today

S&P Global Composite PMI (8:00 am GMT)

What can we expect from EUR today?

S&P Global will release the flash results for Composite PMI for the month of July where business activity is expected to remain relatively stable from the previous month. Economic growth softened to three-month low in June and a further slowdown can not be ruled out for the Euro Area. Should the flash results disappoint market expectations, the Euro could face renewed overhead pressures.

Central Bank Notes:

• The Governing Council today decided to keep the three key ECB interest rates unchanged in July, following a 25 basis points cut in June.
• Accordingly, the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 4.25%, 4.50% and 3.75% respectively.
• Monetary policy is keeping financing conditions restrictive but at the same time, domestic price pressures are still high, services inflation is elevated and headline inflation is likely to remain above the target well into next year.
• While some measures of underlying inflation ticked up in May owing to one-off factors, most measures were either stable or edged down in June.
• The incoming information indicates that the euro area economy grew in the second quarter, but likely at a slower pace than in the first quarter.
• Services continue to lead the recovery, while industrial production and goods exports have been weak – investment indicators point to muted growth in 2024, amid heightened uncertainty.
• The Eurosystem no longer reinvests all of the principal payments from maturing securities purchased under the pandemic emergency purchase programme (PEPP), reducing the PEPP portfolio by €7.5 billion per month on average and the Governing Council intends to discontinue reinvestments under the PEPP at the end of 2024.
• The Council is determined to ensure that inflation returns to its 2% medium-term target in a timely manner and will keep policy rates sufficiently restrictive for as long as necessary to achieve this aim and is not pre-committing to a particular rate path.
• Next meeting is on 12 September 2024.

Next 24 Hours Bias

Medium Bearish

The Swiss Franc (CHF)

Key news events today

No major news events.

What can we expect from CHF today?

Stronger demand for the dollar lifted USD/CHF above the threshold of 0.8900 overnight. This currency pair was trading around 0.8920 as Asian markets came online and is expected to continue its ascend as the day progresses – these are the support and resistance levels for today.

Support: 0.8880

Resistance: 0.8930

Central Bank Notes:

• The SNB eased monetary policy by lowering its key policy rate by 25 basis points for the second consecutive meeting, going from 1.50% to 1.25% in June.
• The underlying inflationary pressure has decreased again compared to the previous quarter but inflation had risen slightly since the last monetary policy assessment, and stood at 1.4% in May.
• The inflation forecast puts average annual inflation at 1.3% for 2024, 1.1% for 2025 and 1.0% for 2026, based on the assumption that the SNB policy rate is 1.25% over the entire forecast horizon.
• Swiss GDP growth was moderate in the first quarter of 2024 with the services sector continuing to expand, while manufacturing stagnated.
• Growth is likely to remain moderate in Switzerland in the coming quarters as the SNB anticipates GDP growth of around 1% this year while currently expecting growth of around 1.5% for 2025.
• Next meeting is on 26 September 2024.

Next 24 Hours Bias

Medium Bullish

The Pound (GBP)

Key news events today

S&P Global Composite PMI (8:30 am GMT)

What can we expect from GBP today?

S&P Global will release the flash results for Composite PMI for the month of July where business activity is expected to remain relatively stable from the previous month. Private sector activity in the U.K, slowed to a year-to-date low in June as new orders lost momentum while employment eased further. Should the flash results disappoint market expectations, Cable could face renewed overhead pressures.

Central Bank Notes:

• The Bank of England’s Monetary Policy Committee (MPC) voted by a majority of 7-to-2 to maintain its Official Bank Rate at 5.25% for the seventh consecutive meeting.
• Two members preferred to reduce the Bank Rate by 25 basis points to 5%, an increase of one from the previous meeting.
• Twelve-month CPI inflation fell to 2.0% in May from 3.2% in March, close to the May Monetary Policy Report projection. CPI inflation is expected to rise slightly in the second half of this year, as declines in energy prices last year fall out of the annual comparison.
• Reflecting a margin of slack in the economy, CPI inflation had been projected to be 1.9% in two years’ time and 1.6% in three years.
• UK GDP appears to have grown more strongly than expected during the first half of this year. Business surveys, however, remain consistent with a slower pace of underlying growth, of around 0.25% per quarter.
• UK real GDP had increased by 0.6% in 2024 Q1, 0.2% stronger than had been expected in the May Monetary Policy Report and Bank staff now expect GDP growth of 0.5% in 2024 Q2 as a whole, stronger than the 0.2% rate that had been incorporated in the May Report.
• The MPC remains prepared to adjust monetary policy as warranted by economic data to return inflation to the 2% target sustainably. It will therefore continue to monitor closely indications of persistent inflationary pressures and resilience in the economy as a whole, including a range of measures of the underlying tightness of labour market conditions, wage growth and services price inflation.
• Next meeting is on 1 August 2024.

Next 24 Hours Bias

Medium Bearish

The Canadian Dollar (CAD)

Key news events today

BoC Monetary Policy Statement (1:45 pm GMT)

BoC Press Conference (2:30 pm GMT)

What can we expect from CAD today?

The Bank of Canada (BoC) is expected to cut its overnight rate for the second consecutive meeting by 25 basis points to bring it down to 4.50% while continuing to normalize its balance sheet. Should BoC Governor Tiff Macklem’s press conference also convey a dovish outlook on future monetary policy action, the Loonie is all but certain to come under intense selling pressures – a move that would boost USD/CAD later today.

Central Bank Notes:

• The Bank of Canada reduced its target for the overnight rate by 25 basis points to 4.75% while continuing its policy of balance sheet normalization.
• Canada’s economic growth resumed in the first quarter of 2024 after stalling in the second half of last year. At 1.7%, first-quarter GDP growth was slower than forecast in the MPR but consumption growth was solid at about 3%, and business investment and housing activity also increased.
• Inflation remains above the 2% target and shelter price inflation is high but total CPI inflation has declined consistently over the course of this year, and indicators of underlying inflation increasingly point to a sustained easing.
• CPI inflation has eased from 3.4% in December to 2.7% in April while the preferred measures of core inflation have come down from about 3.5% last December to about 2.75% in April and the 3-month rate of core inflation slowed from about 3.5% in December to under 2% in March and April.
• In the labour market, businesses are continuing to hire workers as employment has been growing, but at a slower pace than the working-age population while elevated wage pressures look to be moderating gradually.
• The Governing Council is closely watching the evolution of core inflation and remains particularly focused on the balance between demand and supply in the economy, inflation expectations, wage growth, and corporate pricing behaviour.
• Recent data has increased the council’s confidence that inflation will continue to move towards the 2% target. Nonetheless, risks to the inflation outlook remain.
• Next meeting is on 24 July 2024.

Next 24 Hours Bias

Medium Bullish

Oil

Key news events today

EIA Crude Oil Inventories (2:30 pm GMT)

What can we expect from Oil today?

Despite a higher-than-anticipated draw of 3.9M barrels of crude in the API stockpiles, oil prices remain under intense overhead pressures. WTI oil tumbled under $78 per barrel overnight but recovered to retrace higher to trade around $78.50 as Asian markets came online. Should the EIA inventories also post a significant drawdown, it could function as a potential floor for oil prices later today.

Next 24 Hours Bias

Medium Bearish

The post IC Markets Asia Fundamental Forecast | 24 July 2024 first appeared on IC Markets | Official Blog.

Bloomberg (gated) gathered together views on the USD from Deutsche, Barclays, and Morgan Stanley.

• Deutsche Bank say that tarriffs & associated stronger implications for the USD are significantly more likely to be dominant than stated polices to seek a weaker USD
• Barclays say in isolation the tariff risk is enough to support a rally for the USD … but full retailiation for the Trump tariffs could send the dollar 4% higher against FX such as the yuan.
• Morgan Stanley also say that higher Trump tariffs will strengthen the dollar, and even more os when retailiation occurs. MS say its difficult for intervention to alter the trajectory

This article was written by Eamonn Sheridan at www.forexlive.com.